Reposted from: https://www.politico.com/newsletters/weekly-agriculture/2024/01/16/march-cr-plan-puts-farm-bill-at-risk-00135696
In mid-December, OCI Global announced it was selling its subsidiary Iowa Fertilizer Co. for $3.6 billion to Koch Industries, one of the nation’s top fertilizer producers. The Iowa Fertilizer plant has received millions in state and local taxpayer-funded subsidies and tax abatements, the Des Moines Register reported.
Now, some critics are warning that the deal, which is subject to antitrust review by federal regulators, could diminish competition for fertilizer, as farmers have endured high prices related to the war in Ukraine and other supply chain tangles, Marcia writes. Without that competition, critics say, domestic fertilizer prices could be pushed even higher and taxpayer-funded investments to juice competition in agricultural markets could be wasted.
“The more than half a billion in taxpayer dollars offered to build the plant was intended to create jobs, increase competition, and drive down costs,” wrote Scott Syroka, a former city council member in Johnston, Iowa in December. “Permitting the Koch deal to go through would achieve exactly the opposite.”
Likewise, the anti-monopoly group Farm Action warns that the deal demonstrates the need for safeguards for federal grant money.
“These corporations are robbing farmers of their profits and driving up food prices for consumers,” the group warned in a recent blog. “They shouldn’t benefit from the very government projects meant to curb their industry power.”
The Biden administration has made it a priority to expand domestic fertilizer production, making up to $900 million available for the Fertilizer Production Expansion Program.
OCI Global and Koch Industries did not immediately respond to requests for comment.
USDA response: Asked about the OCI-Koch deal, a USDA spokesperson pointed to the USDA’s FPEP, which is intended to bolster competition for domestic fertilizer production and expand domestic supply, making the critical input more affordable for farmers.
“When dominant middlemen control so much of the supply chain – such as in the fertilizer sector – it undermines economic resiliency and robust competition, with both producers and consumers bearing the brunt of these consequences,” said USDA spokesperson Allan Rodriguez. “Developments like these underscore the importance of President Biden’s whole-of-government effort to promote competition in the American economy.”
FPEP also includes some safeguards for taxpayer dollars. If a facility is sold or has a change of ownership within 10 years, for example, USDA will review the sale to determine if the change is no longer consistent with FPEP’s purpose and may require partial or full return of grant money.
